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Aveda Transportation and Energy Services Announces Record Revenue for the Third Quarter of 2012

CALGARY, ALBERTA -- (Marketwire) -- 11/29/12 -- Aveda Transportation and Energy Services Inc. ("Aveda" or the "Company") (TSX VENTURE:AVE), a leading provider of oilfield hauling services and equipment rentals to the energy industry, today announced record revenue for the three and nine months ended September 30, 2012.


--  Revenue for the nine months ended September 30, 2012 grew by $7.7
    million to $60.3 million compared with revenue of $52.6 million for the
    same period in 2011; 
--  Generated net loss for the nine months ended September 30, 2012 of $0.8
    million, as compared to net income of $2.3 million for the same period
    in 2011; 
--  Generated Adjusted EBITDA(1) for the nine months ended September 30,
    2012 of $7.2 million, a decrease of $1.5 million compared with Adjusted
    EBITDA(1) of $8.7 million for the same period in 2011; 
--  Expanded equipment base by acquiring $22.5 million of net additional
    equipment and leaseholds during the first nine months of 2012; 
--  Commenced operations in new branches in Pleasanton, TX and Midland, TX.
    The Company signed a new lease on a new Pennsylvania facility that will
    see its operations move from New Columbia to Williamsport, PA in early
--  Raised $8.0 million ($7.2 million net of financing costs) in new equity
    financing, and increased its existing credit facility to $50 million
    from $35 million; 
--  Acquired selected assets of 1st Rate Energy Services Inc. and a private
    company called Complete Energy Services Inc. together referred to as
    "Complete" for approximately $7.5 million. As a result of the
    acquisition the Company increased its rental fleet by 270 pieces of
    equipment and established operation in Sylvan Lake, AB ; 
--  The Company elected to close its Crossfield, AB rental operation and
    combine it with the newly acquired Sylvan Lake, AB operation; 
--  Following consecutive periods of poor performance, the Company elected
    to close its Melita, MB and Grande Prairie, AB branches and allocated
    its fleet assets amongst other branches; and 
--  Relocated Nisku, AB branch to Leduc, AB and added rig moving to the
    operation along with service work. 


(1) See MD&A Section 8: Non-IFRS Measure

"Despite current market pressures, we have demonstrated that our customers value our services highly which allowed us to continue to grow our operations" said David Werklund, Executive Chairman of Aveda "We continue to build on our strength and lay the foundation for future growth, to become a highly profitable transportation and rentals company to serve the energy industry."

The Company's consolidated financial statements and Management's Discussion and Analysis are available on the Company's website at or the SEDAR website at

Financial Overview

(in thousands, except                                                       
 per share and ratio                                                        
                 Nine      Nine                 Three     Three             
               Months    Months                Months    Months             
                ended     Ended                 Ended     Ended             
            September September    % Change September September    % Change 
             30, 2012  30, 2011 2011 - 2012  30, 2012  30, 2011 2010 - 2011 
Revenue        60,316    52,607        14.7%   19,936    18,106        10.1%
 profit(5)     10,596    12,857       -17.6%    3,492     4,557       -23.4%
Gross margin     17.6%     24.4%      -28.1%     17.5%     25.2%      -30.4%
 EBITDA(1)      7,208     8,677       -16.9%    2,863     2,890        -0.9%
 as a                                                                       
 of revenue      12.0%     16.5%      -27.5%     14.4%     16.0%      -10.0%
Net income                                                                  
 (loss)          (761)    2,263      -133.6%     (431)    1,676      -125.7%
Net income                                                                  
 (loss) as a                                                                
 of revenue      -1.3%      4.3%     -129.3%     -2.2%      9.3%     -123.4%
 EBITDA per                                                                 
 share(1,2)      0.86      1.52       -43.4%     0.29      0.50       -42.0%
Earnings per                                                                
 share -                                                                    
 basic and                                                                  
 diluted(2)     (0.09)     0.40      -122.5%    (0.04)     0.29      -113.8%
 ratio           2.94      0.65       352.1%     2.94      0.65       352.1%
Debt to                                                                     
 ratio(3)        1.53      1.43         6.3%     1.53      1.43         6.3%
Debt to                                                                     
 ratio(3, 4)     3.76      1.74       116.3%     3.76      1.74       116.3%
Net capital                                                                 
 assets                                 Not                             Not 
 addition      22,448        12  Meaningful    11,908        (1) Meaningful 
(1)  This News Release contains the term Adjusted EBITDA. Adjusted EBITDA as
     presented does not have any standardized meaning prescribed by         
     international financial reporting standards (IFRS) and therefore it may
     not be comparable with the calculation of similar measures for other   
     entities. Management uses Adjusted EBITDA to analyze the operating     
     performance of the business. Adjusted EBITDA as presented is not       
     intended to represent cash provided by operating activities, net       
     earnings or other measures of financial performance calculated in      
     accordance with IFRS. It is defined as earnings before interest, taxes,
     depreciation and amortization excluding foreign exchange gains or      
     losses which are primarily related to the US dollar activities of the  
     Company and can vary significantly depending on exchange rate          
     fluctuations, which are beyond the control of the Company, and write   
     downs of intangible assets, goodwill impairment, financing costs, gains
     or losses on disposal of assets, stock based compensation, fees and    
     expenses on settlement of debt and losses on extinguishment of debt.   
(2)  2011 Per share amounts calculated to take into consideration the       
     Company's 30:1 share consolidation which took place on November 28,    
     2011 as if the share consolidation had been in effect throughout 2011. 
(3)  Debt includes, revolving credit facility, loans and borrowings,        
     obligations under finance lease and convertible debenture as per their 
     carrying amounts on the balance sheet.                                 
(4)  Nine and three months ended September 30 debt to EBITDA ratio          
     calculated using Adjusted EBITDA for the trailing 12 months.           
(5)  Gross profit calculated as revenue less direct operating expense.      


The Company earns revenue primarily by providing specialized transportation services to companies engaged in drilling for exploration, development and production of petroleum resources. Demand for the Company's transportation services is therefore linked to the economic conditions of the energy industry and the general level of activity in the exploration, development and production of petroleum resources in Western Canada and in the US. Drilling activity in the WCSB and in the US has in recent history been affected by amongst other things, low natural gas prices and higher than normal natural gas inventories in storage caused by many factors including reduced demand for commodities as a consequence of a global recession and the temporary oversupply of natural gas caused by the fast development of shale gas resources in the US.

Countering these factors is a strong price for oil, which has allowed oil-focused regions to experience increasing rig counts. Two of Aveda's newest branches are benefitting from such increases in Texas, while other US branches have been successful in maintaining revenues and margins despite reduced rig-counts in gas-focused regions such as the Dallas-Ft. Worth basin and the Utica and Marcellus Shale.

In the WCSB, although up to July 2012 rig counts were higher than 2011, levels of activity failed to ramp up(1) to the expected levels in Q3 due mainly to rainy weather conditions. A return to higher activity levels is expected in Q4 as oil and gas companies increase drilling operations with the arrival of the cold weather and the use of their remaining drilling budgets, although it is uncertain if rig counts will return to 2011 levels for the remaining of the year.

Opportunities for expansion and growth continue to appear strongest in the US. According to the Baker Hughes Rig Count(2), drilling activity in the Eagleford and Permian basins has increased on average 30.8% year over year. This has allowed Aveda to grow significantly in these areas, with the opening of two new branches (Pleasanton and Midland) in 2012. The Mineral Wells branch is expected to maintain revenues by acquiring new customers in higher activity areas, to compensate for reduced activity in the Dallas/Ft. Worth gas basin where it operates. Similarly, Pennsylvania has experienced a decline of 30% in active rigs due to the predominance of gas plays in the region, but Aveda's local branch has been able to maintain equipment utilization due to excellent customer relationships and recognized superior operational efficiencies compared to competitors. It is expected that rig counts will continue the downward trend in Pennsylvania gas plays, however management believes the decline may be partially offset by the relocation of rigs to oil plays further west in the state.

The North American economy faces several macro-economic uncertainties, such as, the US fiscal cliff related to the Budget Control Act, the on-going European debt crisis, and the impact of the economic slowdown in China. It is not clear at this time what impact, if any, these uncertainties will have on the North American oil and gas industry and conversely on the operations of the Company. The Company is monitoring these macro-economic issues through feedback from its customers and will adjust its operations as necessary.

(1) June Warren Nickels Rig Locator, accessed on October 15, 2012, at

(2) Baker Hughes Rig Count, accessed on October 15, 2012,

About Aveda Transportation and Energy Services

Aveda provides specialized transportation of products, materials, supplies and equipment required for the exploration, development and production of petroleum resources in the Western Canadian Sedimentary Basin and in the United States of America principally in and around the states of Texas and Pennsylvania. Transportation services include both the equipment necessary to move the load as well as a trained, professional driver capable of securing, moving and manipulating the load at its origin and destination. Aveda's rental operations include the rental of tanks, mats, pickers, light towers and other equipment necessary for oilfield operations.

Aveda was incorporated in 1994 as a private company to serve the oil and gas industry. In the spring of 2006 the Company went public on the TSX Venture Exchange. Aveda has major operations in Calgary, AB, Slave Lake, AB, Leduc, AB, Sylvan Lake, AB Mineral Wells, TX, Pleasanton, TX, Midland, TX and New Columbia, PA. Aveda is publicly traded on the TSX Venture Exchange under the symbol AVE. For more information on Aveda please visit

This News Release contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "achieve", "could", "believe", "plan", "intend", "objective", "continuous", "ongoing", "estimate", "outlook", "expect", "may", "will", "project", "should" or similar words, including negatives thereof, suggesting future outcomes. In particular, this News Release contains forward-looking statements relating to: demand for the Company's services and general industry activity level; the Company's growth opportunities; and expectation to maintain revenue and equipment utilization. Aveda believes the expectations reflected in such forward-looking statements are reasonable as of the date hereof but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon.

Various material factors and assumptions are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking statements. Those material factors and assumptions are based on information currently available to Aveda, including information obtained from third party industry analysts and other third party sources. In some instances, material assumptions and material factors are presented elsewhere in this News Release in connection with the forward-looking statements. Readers are cautioned that the following list of material factors and assumptions is not exhaustive. Specific material factors and assumptions include, but are not limited to:

--  the performance of Aveda's businesses, including current business and
    economic trends;
--  oil and natural gas commodity prices and production levels;
--  the effect of the rebranding on Aveda's businesses;
--  capital expenditure programs and other expenditures by Aveda and its
--  the ability of Aveda to retain and hire qualified personnel;
--  the ability of Aveda to obtain parts, consumables, equipment,
    technology, and supplies in a timely manner to carry out its activities;
--  the ability of Aveda to maintain good working relationships with key
--  the ability of Aveda to market its services successfully to existing and
    new customers;
--  the ability of Aveda to obtain timely financing on acceptable terms;
--  currency exchange and interest rates;
--  risks associated with foreign operations;
--  changes under governmental regulatory regimes and tax, environmental and
    other laws in Canada and the United States; and
--  a stable competitive environment. 

Forward-looking statements are not a guarantee of future performance and involve a number of risks and uncertainties, some of which are described herein. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause Aveda's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the risks identified in Aveda's annual information form and management discussion and analysis for the year ended December 31, 2011 (the "MD&A"). Any forward-looking statements are made as of the date hereof and, except as required by law, Aveda assumes no obligation to publicly update or revise such statements to reflect new information, subsequent or otherwise.

This News Release contains the terms EBITDA and Adjusted EBITDA which are defined in the MD&A. EBITDA and Adjusted EBITDA as presented do not have any standardized meaning prescribed by international financial reporting standards (IFRS) and therefore may not be comparable with the calculation of similar measures for other entities. Management uses Adjusted EBITDA to analyze the operating performance of the business. Adjusted EBITDA as presented is not intended to represent cash provided by operating activities, net earnings or other measures of financial performance calculated in accordance with IFRS.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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